The 4 Benefits of Transparency We’ve Seen at Our Startup

Since the beginning of Buffer, we’ve always shared all of our learnings and failures. Over time this developed into a more defined goal and principle as part of the values of the company.

Since we defined our value of transparency within the culture, we have found many things within the company that we weren’t being completely open about, and we put them out there for the world to see. We’ve generally found that we are sharing a lot of things that are somewhat taboo or at least unusual to be shared publicly.

As an example, here are some of the things we share:

We share the salaries of the whole team in this spreadsheet. My salary is $175k.

Why be so transparent?

For us, transparency came quite naturally. Leo and I always felt very comfortable and excited to share our learnings. It helped us get more feedback about decisions and it was a way to help others who are getting started.

We weren’t always as transparent as we are today; our openness grew as the company expanded. We had a vision to continue becoming more open and we’ve been lucky to find people to join the team who encourage more openness rather than being hesitant about its potential downside.

In the recent months, I’ve been asked many times why we would choose to be so transparent. If I’m completely honest, it’s not something I had given all that much thought. I think being transparent is a little like creating a startup: if you focus on the downsides, you’ll probably just never do it. At the same time, I wanted to have good answers and it felt responsible to give it real thought.

“Trust is the foundation of real teamwork. And so the first dysfunction is a failure on the part of team members to understand and open up to one another. And if that sounds touchy-feely, let me explain, because there is nothing soft about it. It is an absolutely critical part of building a team. In fact, it’s probably the most critical.” – Patrick Lencioni

Lencioni goes on to explain that being vulnerable amongst teammates and being comfortable having debate and conflict is critical to building trust.

For us, we’ve found that transparency is another great way to build trust in a team. If all the information about everything that’s going on is freely available, that helps everyone to feel completely on board with decisions.

Based on my learnings from TheFive Dysfunctions of a Team, I believe the following to be true about transparency in relation to trust:

Transparency breeds trust, and trust is the foundation of great teamwork.

This trust extends to customers, readers of our blog and anyone who interacts with us on any level. We believe that being open helps us to build trust and share our reasoning for the features we have, our pricing, what we blog about, and many other choices.

2. Transparency helps with innovation as a company grows

One of the interesting (and exciting) consequences of growing from a few founders to a 20+ person team and beyond, is that the innovation and decision making has to become distributed. It is both a challenge and a joy for me that I will most likely not be the one who figures out our next biggest product improvements and innovations.

That’s where transparency comes in. As you grow and rely on your team members to make great decisions, they need to have all the details that you have. Keith Rabois put this really well in an article on First Round Capital:

“if you want people to make the same decisions that you would make, but in a more scalable way, you have to give them the same information you have.” – Keith Rabois

3. Transparency leads to greater justice

We have a formula that determines the salaries of everyone in the team. It has a number of factors such as your role, experience and location. As an example, one factor the formula doesn’t have is gender. When you determine salaries in a more ad-hoc way or through negotation, I think a lot of inequality could creep in.

John Mackey, co-founder and CEO at Whole Foods said that with transparency, “any kind of favoritism or nepotism is seen.”

4. You open yourself up to more feedback

By practicing transparency, we’ve found that we get much more feedback on our decisions. We try to take in all that feedback and make adjustments based on it. For example, when we shared our salary formula, a lot of people mentioned to us that we weren’t paying high enough salaries for people in the San Francisco Bay Area, so we made an adjustment to the formula. Now we’re in a much better position to attract new team members in the Bay Area.

It’s great to get this feedback. It can be a challenge: we’ve tried to work on ourselves and grow a team that enjoys and embraces the feedback we receive. As we grow, the feedback has increased too, which will become an interesting aspect to handle. It’s one of the reasons we have a large customer happiness team and strive to provide great customer support.

In truth, we don’t have a reason for our transparency

One of the most interesting business books I’ve recently read is Joy at Work by Dennis Bakke. Bakke was the co-founder and CEO of a large US energy company called AES, which reached $8 billion in revenues and 50,000 employees. They operated in a highly unusual, decentralized business model and they had a core value of Fun. In his book, he argued that it is dangerous to tie benefits and reasons to your core values.

“I kept saying that our values were not responsible for the run-up in our share price and should not be blamed for any down-turns in the future.” – Dennis Bakke

Bakke explained that as soon as you tie your values to performance, it means that you will question them when you hit a tough patch of your journey.

For us, we believe that transparency at its core is honesty, and it’s a value that we want to live by no matter what.

It seems that it is very important that you determine good values if you choose to take this approach. For example, your methods should change a lot. Your principles or values should rarely need to be altered.

All that to say, despite all the benefits we see, those are not reasons that we are transparent. They are nice side effects, and there are downsides too, and we are happy with both aspects.

I’d love your thoughts on our approach to transparency. Drop me a note in the comments and I’ll try to respond. Also, if you are striving to build a company in a more transparent way too, get in touch! I am keen to surround myself with people who are also embarking upon this adventure.

thanks a lot for the insights on transparency and especially you’re conclusion about if there is a economic reason for transparency or not!

In my opinion, transparency is one of Buffers key values, as far as I understood your company culture. It might be, that everything would be the same with only internal transparency(despite the lack of external input), but I don’t think so.
I think it’s a difference if you’re building and living a company culture only internally (this could be awesome as well) or if you doing this in such an open way like Buffer.
For me, the difference is obvious if it’s coming to recruiting. You don’t have to prove your company culture as everybody can dive into it. And – I assume – you’re attracting a special kind of people who are the foundation for your success, and for further ideas on transparency, as mentioned. :-) So, in this special way, I think transparency affects your performance.

To share my own experience; on non-transparency: I experienced its affects from time to time, especially with “secret” salaries. Colleagues left because of this, even with a heavy heart. This directly influenced the atmosphere and the performance of the company. So again – my appreciation for your approach on transparency, Joel!

Thomas Gegenhuber

Thank you Joel for providing insight into Buffer’s rationale for being transparent. In your article you mention how transparency breeds trust among the team, customers, and blog readers – How did (potential) investors react to your unprecedented level of transparency?

I am curious regarding the positive side effects of being transparent?

For other companies who want to follow your example it would be great to know about the potential challenges and hurdles to expect when being transparent. Did you experience any downsides, trade-offs?

Could not agree more.. I have this theory that ultimately all business will have to adopt some levels of transparency to get acceptance by even the would be employees, in future.. I see that coming looking at the evolution of software systems around us. Over the time people will settle for things that are more stable and reliable and this is not easy in a world where all the key information driving things is hidden from the stakeholders..